UK childcare costs childcare costs 'amongst the highest in Europe'

The spiralling cost of childcare in Britain could be cut by reducing the number of staff in nurseries and children’s centres, a report by an influential thinktank today argues.

In the UK, parents now spend around a quarter of their annual income on childcare for under-fives – more than almost any other developed nation. This amounts to around £200 a week for full-time care, rising to £260 a week in London.

“The average British family spends a higher proportion of their wages on childcare than any other nation except Switzerland, 27 per cent of their net income for a family where both parents earn the average wage,” says the study by thinktank CentreForum.

“This figure does not reflect the large support given to very low income families. Childcare is increasingly beyond the reach of the ‘squeezed middle’ families.”

To blame, says the report, is a decline in the number of childminders, forcing mothers and fathers to turn to more expensive nurseries.

In fact, since the mid-1990s the number of registered childminders in Britain has almost halved from 103,000 to 57,000.

The study says many have been pushed out of business by “red tape” and the financial cost of meeting government regulations – including that there should be one member of staff for every three children under five.

Conservative MP Elizabeth Truss, author of the report by the liberal independent thinktank, proposes that the cost of childcare should be slashed by reducing the required ratio of adult to child.

In other European countries, including the Netherlands, Ireland and Germany, the required ratio is one staff member for every five under-fives.

Truss argues that this would enable higher paid staff to be attracted into the profession, thus improving quality of care – or allow nurseries and childminder agencies to make the costs to parents more affordable

She said: "The coalition government has a great opportunity to simplify the provision of childcare and get better value for money for parents. Reform could lead to an increase in availability of flexible childcare and an end to spiralling costs."

The paper recommends that the UK adopts an agency structure similar to the childminder or 'host parent' agencies found in the Netherlands. It also argues that nurseries and children's centres should be able to apply for academy status, regulated by Ofsted but free from local authority control.

This would allow for a simpler and administratively cheaper system of funding, the report says, where a single childcare support payment for parents replaces childcare tax credit, nursery vouchers and employer vouchers.

Restrictions on informal care should also be relaxed, allowing parents to pay neighbours or friends using their own money – a practice currently not allowed if the carer is not Ofsted registered.

The study adds that, to ensure the child's safety, anyone being paid to look after children should have a Criminal Records Bureau check.

But Anne Longfield, chief executive of national families charity 4Children today rejected the notion that cutting the number of staff working with children was a credible way to cut costs for parents.

She said: “Elizabeth Truss is right to raise the issue of spiralling childcare costs as a key issue for working parents. It is absolutely essential that this is tackled, to help families and the economy. Cost effectiveness and quality of childcare provision must be looked at, but proposals to cut the number of staff working with children is not the answer.”

Longfield added: “Parents need to be able to work with the peace of mind that their children are well cared for… Children deserve quality provision that does not compromise their safety and their parents need to have a realistic chance of accessing this - whatever their background.”

She said the best way to reduce costs of childcare for parents in need was instead to “increase the childcare element of tax credits and ensure tax credits keep pace with inflation.”